NYC Gets Citywide Deal for Microsoft Cloud Apps

By Kevin McCaney

10/21/2010

New York City has struck a deal with Microsoft for a single, citywide license for the company's software under which the city, operating in a cloud computing environment, will pay only for the applications that employees use.

Under the agreement announced today, about 100,000 city employees will have access to Microsoft's Web-based cloud computing services, which would give employees up-to-date tools, foster greater collaboration, and save the city an estimated $50 million over five years, according to an announcementfrom the city.

The agreement with Microsoft is part of a larger effort by New York, called SimpliCity, to streamline operations and reduce costs through technology.

Before today's agreement, announced by Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer, New York had more than 40 separate license agreements, along with other, separate support deals. Under the licenses, the city paid for a the full Microsoft Office suite -- including Word, Excel, PowerPoint, Outlook and other tools — even if many employees used only Word and Outlook.

Under the new deal the city will pay only for the applications employees use.

The cloud computing environment will give city workers applications that are automatically updated and allow them to collaborate more easily and share applications created by city programmers, the city's announcement said.

The agreement resulted, at least in part, from the competition among Microsoft and other cloud-based services providers, such as Google and IBM, Ashley Vance writes in the New York Times. Google Apps for Government has been adopted by Los Angeles and other cities, for example, as well as some federal agencies.